$23bn needed to meet 2035 climate goals – finance minister

Barbados will require an estimated $23 billion in public and private investment to achieve its climate agenda by 2035, with the government pursuing new financing mechanisms to strengthen resilience before disasters occur, Finance Minister Ryan Straughn has told a climate forum.

He disclosed the figure on Wednesday during the two-day Climate Smart Summit at the Hilton Barbados Resort, outlining what he described as the next major challenge facing small island developing states.

“Two years ago, the Cabinet agreed [on] our climate investment plan, and that rounded off at about US$11.6bn [$23.2bn] as a number that included both public sector investment, as well as private sector investment in order to achieve the climate agenda by 2035,” he said.

While Barbados has already developed its investment blueprint, Straughn argued that implementation remains the critical hurdle.

“The real challenge and the real question is how do we now move from these plans to full implementation and how do we reduce and remove the barriers that prevent investment and essentially drive more resilience or sustainable development into our region.”

Barbados continues to advocate for the proactive use of natural disaster clauses embedded in debt instruments, allowing countries to build resilience before catastrophes strike rather than waiting for relief afterwards, he said.

“We really don’t want to experience the hurricane or the earthquake or whatever it is to get relief. We really want to be able to drive the building of resilience ahead of the storm or natural disaster.”

According to Straughn, depending on when those clauses are triggered, Barbados could access between $3.2bn and $4bn over a two-year period to support resilience-building initiatives.

“The intention then will be to deploy those resources to build resilience,” he said.

He maintained that creating fiscal space ahead of disasters would allow governments to undertake critical projects while their economies remain productive.

“It allows … any country, any small state, to be able to use the existing resources that it has whilst the economy is actually live and in production to be able to achieve the building of resilience.”

The finance minister also pointed to Barbados’ use of debt-for-development swaps to advance major projects without worsening the country’s debt burden.

“So, one of the things that we have been doing over the last years is utilising debt swaps to be able to create space to advance some of these projects,” he said.

He cited the South Coast Sewage Treatment Plant upgrade as one example.

“Our South Coast sewage plant right now is being constructed to be debt neutral from the second swap that we did with the [Inter-American Development Bank] IDB and the  [European Investment Bank] EIB, which was also supported by the Green Climate Fund.”

The upgraded facility, he noted, is expected to support both water security and agriculture.

“Barbados is water-scarce,” he said. “Having done our legislation and the regulations for water reuse, we’re upgrading that plant to tertiary so that the reuse of the water will be reusable with respect to replenishing our aquifers but equally supporting the agricultural sector.”

Beyond climate adaptation, Straughn stressed that resilience must also address social challenges. He revealed that the government is pursuing a third debt swap focused on health outcomes. Part of that effort, he added, will target childhood obesity.

“We have a significant prevalence of NCDs across the country… reduce the level of childhood obesity, which is now measured at 42 per cent.”

He warned that climate resilience cannot be separated from broader national wellbeing.

“For a small state to have such a high prevalence of childhood obesity is significant and clearly something that needs to be addressed.”

Straughn said financing solutions were not the region’s greatest obstacle:

“I am absolutely convinced that we can financially engineer any solution.”

“What we really need is dedicated access to some of the technologies at scale that allows countries to, when their projects are ready, that there is a clear framework that allows us then to achieve [them] at reasonable cost.”

He pointed to renewable energy technologies, particularly battery storage, as an area where Caribbean states struggle due to their relatively small markets.

“Our orders are simply too small to even get anybody’s real attention, and therefore the region needs to be able to work together aggressively.”

The minister also urged investors to partner with Caribbean governments and citizens, arguing that resilience efforts should generate wealth within the region.

“The opportunity for the average citizen to invest in any of these projects is important.”

“Any investment that’s coming in from the outside, we want them to be able to partner with and mobilise our private capital within the region.”

He added: “If you’re talking about resilience, not just climate resilience, but you’re talking about how do you generate wealth to move from one generation to the next, that is important for the Caribbean to be able to achieve.” (LE)